How Predictive Scheduling May Affect Your Small Business

Rely on Shift Workers? Predictive Scheduling may pose employer challenges. Learn the Pros and Cons that may affect your small business and our recommendations.

Have Shift Employees? How Predictive Scheduling May Affect Your Small Business

Restaurant and retail employees work in a world where schedules are predictably unpredictable. Roughly 17 percent of the workforce has unstable work shift schedules. It's common for employees to report for work and then be sent home early because business is slow. Or have their shifts canceled with short notice, leaving employees wondering how they might pay their bills.

That's why some states have adopted "predictive scheduling" laws to improve job stability in a work arena that has been historically plagued by uncertainty. To date, the movement toward predictability involves only a handful of states, but it's expected to expand to other areas in the future. Proponents say it's good for hourly employees. Opponents of the practice say it penalizes employers for unpredictable circumstances.

Predictive Scheduling Has Pros and Cons

Predictive scheduling creates penalties for employers who change work schedules on the fly. The goal is to deter spur-of-the-moment schedule changes.

Generally speaking, here's how it works: Employers provide employees their work schedules a few weeks in advance and guarantee them a certain base pay should their hours unexpectedly be reduced. The scenario guarantees workers a certain amount of pay – no matter what – so they can pay their bills and plan for other expenses, without having to worry.

The premise is a great one for affected employees because it lends some stability to jobs that are typically very unpredictable. However, predictive scheduling can be costly for small employers already struggling with schedule changes or gaps that occur when an employee calls in sick.

Let’s take a closer look at the laws some cities have already put into place:

Seattle, WA:

The “Secure Scheduling Ordinance” requires certain employers to provide new hires a good-faith estimate of their work hours and give employees their work schedules two weeks in advance. Under the new law, employers must provide workers additional pay if their hours are changed with less than two weeks’ notice or if they are scheduled to work front-to-back shifts with fewer than 10 hours between the two. Although the Seattle ordinance applies only to large employers, it highlights the effort to help workers predict their take-home pay. The law took effect in July 2017.

San Francisco, CA:

San Francisco’s two-part law requires businesses to first offer available hours to existing part-time workers before hiring new ones. The second part imposes penalties for changing worker schedules on short notice. The law went into effect in 2015.

The San Francisco law applies to small businesses, and requires employers to pay one hour of predictability pay if workers’ schedules are changed with less than a week’s notice. Workers receive additional pay if their schedule is changed with less than 24 hours’ notice or they’re not called in to work during an on-call period.

Oregon:

This state has proposed a law that would require employers to pay for up to four hours of unworked time if an employee’s shift is canceled or shortened. Employers additionally would be required to comply with new recordkeeping obligations to show compliance with the law.

Under the proposed Oregon law, employees could request not to be scheduled on certain days, during certain times or at certain locations. Employers could request documentation for the requests but could not retaliate or discriminate against employees.

Large Oregon employers would face even stricter guidelines and be required to grant special work requests, unless the company could cite a business-related reason why the request would not work.

Emeryville, CA:

Emeryville’s Fair Work Week Ordinance, effective July 1, 2017, requires covered employers to provide employees two weeks’ advance notice of their work schedules by posting the work schedule in an accessible location or by notifying employees electronically. An employer also must notify employees of any schedule changes in person, by phone, email, text message or other form of electronic communication.

The law applies to certain retail and fast food employers.

Employees can decline any previously unscheduled hours and the owner owes “predictability” pay when the employer adds or subtracts hours or moves the worker to another date, time or cancels a previously scheduled shift.

A covered employer must also first offer additional work hours to existing, qualified part-time workers before hiring anyone new.

New York City, NY:

New York City passed predictive scheduling legislation under the Fair WorkWeek Ordinance, effective November 2017, for retail and fast food employees.

Under the New York City law, employers are required to post schedules at least two weeks in advance. In addition, they must pay a premium between $10 and $75 if the schedule changes with less than two weeks’ notice. There are also specific requirements for employers, depending on if they are categorized as a retail or fast food industry. Employers also are required to ban “clopening” shifts, which include two shifts scheduled over a two day period that contain less than 11 hours between shifts. The only exception is employees who consent in writing and are paid a $100 premium to work the shift.

Consequences of Compliance Pose Business Challenges

Workers may welcome the surge in predictable scheduling laws, but the logistics of the laws may be problematic and challenging for small businesses.

Here’s why: demand for workers can vary according to weather, the season, and special sales. Predictive scheduling laws put businesses on the hook for employees they might not need or a change in circumstance that can’t be predicted.

For example, an outdoor hotdog stand might need full staffing most summer days, but if a daylong downpour occurs, the business owner could be penalized for sending workers home. A work schedule that was created two weeks earlier couldn’t possibly take into account the bad weather.

Predictive scheduling could also deter employers from offering extra shifts on short notice to employees because they would be penalized for a last-minute schedule change.

The Right Solution Can Help You Follow the Rules

Stay in compliance with Predictive Scheduling laws no matter what state you’re in. With TrackSmart Scheduling, you can: